Not everyone is applauding Gov. Jon Huntsman Jr.’s recently unveiled Home Run grant program, which divvies up $10 million in federal stimulus money to roughly 1,600 prospective homebuyers. Some affordable-housing advocates are crying foul, saying that, while the grants will help out 1,600 homebuyers, nearly 10 times that number of people—15,000 in Utah—currently face foreclosure, according to a recent study from the University of Utah.
Tim Funk, housing director for the Crossroads Urban Center, says the problem will get worse before it gets better. “We are not anywhere near the bottom of the foreclosure trough and—as far as taking bold action—this governor sucks.” With the March 20 signing of Senate Bill 260, the Housing Relief Restricted Special Revenue Fund, Huntsman authorized the disbursement of $10 million for the Home Run program which can be used to purchase newly built homes, as well as a more meager $1.8 million culled from the federal stimulus package to go toward counseling services for residents facing foreclosure.
In addition to giving consumers a helping hand for the purchase of a newly constructed home, the Home Run program will revitalize the ailing residential construction industry, says Grant Whitaker, president of the Utah Housing Corporation. His agency is charged with administering the program.
Whitaker says there are roughly 3,000 newly built homes sitting unoccupied in Utah’s housing market. “That’s many more than would normally be on the market,” Whitaker says. “To try and get those sold and get people back to work is what the whole thrust of this [program] is about.”
In a press release, Huntsman estimated the resulting new construction would bring 8,800 jobs and $324 million in wages into the economy. Whitaker also pointed out the loss in 2008 of 18,000 construction jobs: “Three times as many as in any other sector of our economy.”
But affordable-housing advocates like Funk worry that creating jobs before halting foreclosures ignores the greater threat. “I think it’s a tragedy that no one has gotten the perspective on this,” Funk says. “[The Home Run is] $10 million for a feel-good program—and God bless him for putting young people in homes—but you could ask the question: How is helping new homebuyers going to stop the foreclosures?” Funk suspects that the greater allocation of resources toward stimulating sales of newly constructed homes may be due to political favoritism to the home-construction lobby.
The plan had a broad base of support including from the Salt Lake Chamber, which identified the measure as one of its 2009 legislative priorities.
Funk is still upset over how little attention he believes the governor has paid to halting foreclosures. “The breadth of the foreclosure [issue] in Utah is so immense, it requires gubernatorial action.”
Other states´ governors have intervened, including California, where Gov. Arnold Schwarzenegger imposed a 90-day moratorium on foreclosure in February 2009. State Rep. Brian King, D-Salt Lake City, as well as five Democratic Salt Lake County Council members wrote letters to Huntsman urging him to follow California’s lead and impose a moratorium on foreclosures in the state.
“Why don’t you consider refraining from all these foreclosures for a period of time while we try to get our heads screwed on straight?” King asks. He says he has not heard a reply from Huntsman.
Spokesperson for the Governor´s office, Lisa Roskelley says she could not comment on the suggested moratorium. Roskelley says the governor’s Home Run program is a comprehensive effort for re-invigorating the housing market and the economy.
“It has different focuses for different people,” Roskelley says. “To move people into homes as well as workers back into construction jobs and make sure people have tools and access to help prevent foreclosures.”
“I’m glad the governor is doing something,” says Heather Tritten, executive director of the Utah Community Action Partnership Association. Tritten, besides advocating for low-income families in Utah through UCAPA, was also a member of Huntsman’s Utah Housing Action Coalition that recommended the $10 million fund for new homebuyers.
Tritten supports the measure but thinks it would have been more helpful if it didn’t have the stipulation that it could only be used for purchasing new homes. “Buying existing homes [that have previously been occupied] still stimulates the economy,” she says. But, for Tritten, the move to expand new home construction shouldn’t outpace taking care of existing homeowners.
“My biggest concern,” says Tritten, “is that I have a value on existing communities, and making sure they’re strong before building out farther and farther.”